My project here is getting pretty complicated, and I fear
that in trying to explain this, I might confuse you. If so, please
let me know.

To start with, I am generating a grid through xml. In the
code supplied here, there are about 800 little 25 X 25 squares. All
of these squares are mcbuttons with the linkage butTemp. When you
roll over the square you are also generating two text fields in a
movieclip called but state. The text fields are instanced through
'username_txt' and 'statement_txt'.

OK, all of this works. I have a grid, you roll over it, and a
speech bubble with two xml generated lines of text pop up. My
PROBLEM is that I dont understand how to manipulate the speech
bubble so that it is staying on top of the grid. That probably
doesn't make sense. Imagine that you are at the top left square and
when you roll over it, a speech bubble like you would see in
newspaper cartoons comes down and to the right. This fits nicely
over the grid. However as you scroll along and hit the top right
square, the speech bubble is hanging way off the side.

To sum it up, How do you change the speech bubble from image
one that will hang down and to the right, to image two that will
hang down and to the left. How can I code it so that say 8 buttons
from the right, the mc changes.

Thanks for reading all of that and any suggestions would be
gratefully accepted.

"To sum it up, How do you change the speech bubble from image
one that will hang down and to the right, to image two that will
hang down and to the left. How can I code it so that say 8 buttons
from the right, the mc changes."

Either two movieClips and toggle between two or one MovieClip
where on frame is one image and a second frame is the other image.

In either case you need to provide logic of which to choose.
It could be proximity to the edge of another clip, the _width of a
container type of clip or the Stage.width or just hard coded for
specific grid items based on their row and column count
positions.